Wright Medical Subpoenaed

Posted on Dec 17, 2007

Wright Medical Group Inc. said Wednesday the Department of Justice subpoenaed nine years of records, bringing the medical devices company into a larger investigation over industry payments to doctors using orthopedic products.

The company said it was asked, through the U.S. Attorney for the District of New Jersey, for records relating to any consulting and professional service agreements with orthopedic surgeons dating back to 1998. The Justice Department is looking for possible payments made to doctors in exchange for the use of company products.

In September, five orthopedic device makers agreed to pay $310 million and accept federal monitors for an 18-month period to settle concerns over doctor kickbacks. The government started investigating the industry in 2005 over concerns companies paid doctors in order to favor their products.

Zimmer Holdings Inc. is paying more than half of the $310 million, with the rest coming from DePuy Orthopedics Inc., Smith & Nephew Inc. and Biomet Orthopedics Inc. Stryker Corp. was not charged because it cooperated with the government investigation before the others did. The companies will be monitored for 18 months and will require doctors to disclose all consulting agreements with patients. Companies also have to post the deals and amounts on their Web sites.

Wright Medical, which makes knee replacement systems and products for orthopedic surgeons, said it will fully cooperate with the Justice Department. The company said it is unsure how the investigation will impact its financial guidance.